MPs call on Government to carry out 'meaningful review' of early years funding

It has written to the Chancellor Rishi Sunak and Education Secretary Gavin Williamson pressing on them to work in partnership to address flaws in funding of early years provision.

The APPG is calling on the Government to use the upcoming Spending Review to address funding shortages in the early years sector, including those highlighted by the Early Years Alliance’s Freedom of Information (FOI) request last week, which showed that there is a shortfall of £2.60 per child, per hour for every 30 hour place.

The cross-party group wants a catch-up premium of £2,964 per child, per year, under the 30-hours entitlement to ensure the early years sector can meet the needs of children and support parents getting back into work to help drive a post-Covid economic recovery.

It is asking the Government to conduct a ‘meaningful review’ of early years funding to cover:

• A multi-year funding settlement to allow providers certainty and planning over the coming years.
• Developing a mechanism for funding allocation to address rising costs, especially ensuring providers can pay early years professionals the National Living Wage.
• Simplifying the funding system to ensure that Government funding follows child and that parental understanding around the entitlement is improved, especially for two-year olds and tax-free childcare.
• Ensuring effective use of public money and maximum investment in children’s early education and care by minimising barriers like VAT and business rates on providers delivering publicly funded places.
• All allocations of early years funding are undertaken considering of the needs of children with SEND across all settings.
• Setting out a clear vision for the early years and childcare workforce and a restatement of the crucial importance of achieving a well-qualified, high status and better rewarded professionals.

'Fourth emergency service'
Addressing yesterday’s [Tuesday] APPG, chair Steve Brine MP, said, ‘This is about more than money but also the certainty that our early years sector needs to put the needs of every child at every setting at the heart of their work without having to worry about the future sustainability of those settings or their job in those settings. That’s what we are really about. Despite their status as the fourth emergency service, too many early years settings have actually closed or shed staff in the last 12 months.

‘In addition, the Early Years Alliance has shown that there is a shortfall of £2.60 per child per hour of every 30 hours and this amounts to just shy of £3,000 a year. Now of course, as a Government MP I am very proud and campaigned on the 30 hours places but it has to be fully funded.’

Minister for children and families Vicky Ford praised the ‘strong and dedicated’ early years workforce for the hard work and ‘love and support’ it has provided to children and families during the pandemic. She also recognised the continued need for families to access high quality early education.

‘This is why a couple of weeks ago when we announced our £1.4bn package to boost education recovery we included £153m – so well over 10 per cent of that money – for high quality professional development for early years practitioners, including through new programmes focusing on key areas like speech and language development and physical and emotional development for our youngest children,’ she said.

Referring to the Alliance’s FOI request, Ms Ford said that it ‘predates the significant investments that were made in 2019 and 2020 in uplifts to the early funding rates for the free child care offers’.

She added, ‘We have spent over £3.5bn in the last three years on early education entitlements and the Government continues to support families with their childcare costs. We continued funding nurseries and pre-schools at pre-Covid levels throughout the last calendar year even if children were not attending. Back in November we also announced £44m investment for 2021-22 to enable local authorities to increase the hourly rates paid to childcare providers for their free offers and that was on top of the £66m announced in the 2019 Spending Review.’

In response, the Alliance’s chief executive Neil Leitch stated to the APPG, ‘Minister Ford implied the FOI did not take into account recent funding.

‘To be clear, DfE anticipated the funding required in 20/21 to be £7.49 per hour. Regardless of recent investments, the current average rate paid is £4.89, so where is the justification in defending the position? This was not on the current SoS and Minister’s watch, so they have the choice to continue to be complicit or switch on their moral compass and do something about it!’

Finding solutions
Commenting on the APPG’s calls for catch-up funding, chief executive of the National Day Nurseries Association, Purnima Tanuku highlighted that early years providers are an essential part of the national infrastructure, enabling parents to return to work and support local economies.

She added, ‘But the evidence all shows that the early years sector is underfunded for years for the excellent support it delivers. Parents, providers and politicians all recognise this and now the Government must act. It must offer urgent early years recovery funding and business rates relief for childcare businesses and bring the Early Years Pupil Premium in line with rates for eligible primary school pupils.

‘In the long-term, we have to find the solutions to ensure that the childcare system works for parents, providers and the workforce, but most importantly is delivering high quality early education for our youngest children.’